AAdvantage Revenue-Based? “Not Now; but Maybe”

C onverting the American Airlines AAdvantage frequent flier loyalty program from a distance-based program to a revenue-based program is supposedly “not even on the plate right now”, according to an interview posted by Business Travel News magazine with Doug Parker, who is the chief executive officer of American Airlines. “We have to get the two frequent-flyer programs merged first. If it makes sense to make that innovation, we may do that, but to try to change the program now would be foolish.”

This may come as some relief to members of the American Airlines AAdvantage frequent flier loyalty program, who feared that it would follow in the footsteps of the United Airlines MileagePlus and Delta Air Lines SkyMiles frequent flier loyalty programs — both of which had virtually identical announcements released earlier this year that the earning of miles would be based primarily on revenue rather than on distance flown.

“Anyone who doesn’t think that AA-US will eventually go revenue-based after its merger is completed is kidding themselves”, warned FlyerTalk member bhrubin. “With DL and UA already revenue-based, the only competitive thing to do is match that…or lose revenue opportunity. NOT having a revenue-based rewards program will only get AA-US the lion’s share of mileage run hoarders which will LOSE the airline of potential revenue, which is why UA followed DL’s lead. Like it or not, revenue-based awards programs are fairer in rewarding those who provide the most revenue for the airline as opposed to those who fly the most; an airline is not in the business of providing mileage but in the business of making money, after all.”

I believe that it makes sense for American Airlines to wait and see what happens with United Airlines and Delta Air Lines; as well as concentrate on a successful completion of the merger with US Airways — which has had quite a rocky road with its merger with America West Airlines several years ago…

…and no one is certain as of yet just how successful the frequent flier loyalty program of a legacy carrier based primarily on revenue will be — and there is an excellent article posted yesterday at the weblog of InsideFlyer pertaining to this very topic.

Regardless, I am sure that there are many members of the American Airlines AAdvantage frequent flier loyalty program who are hoping that the merger with US Airways Dividend Miles takes a lot of time before it is completed…

Man, there is so much “reading between the lines” with Doug’s words. I suspect you’re probably right on most of these things though – executives are always very…selective about their words.

AA is in a great spot right now – they can sit back and watch DL SP and DL SP UA MP 2015 programs under the excuse of “integration”. If there’s an opportunity, American could position itself as the customer-friendly loyalty program. Otherwise, it could implement a more optimized revenue-based program. Great timing.

Minor note: Doug Parker is the Chief Executive Officer of American Airlines.

I regularly travel on high priced tickets, in many cases booking at the last minute. While I know I’m in the minority of FFs, I (a) am looking forward to flying the two revenue-based carriers and (b) will likely fly AA less as a result of their program. I just flew a 501 mile route (1,002) round trip on a $1,500 walk up fare. Undel DL’s new system, I’d earn 13,500 miles (plus 4,500 AX points for CC spend) and 1,300 or so spg points, integer multiples better than what my PM and F cos bonuses got me.

Frankly, rt transcons will earn me typically 50k points…4x what I get now.

I know these changes make many upset. They are rewarding pax who pay money, not fly four segments on a $300 fare. While an unfortunate change for some, it is a logical business decision….and will earn more traffic from me.